On February 1 the U.S. Congress passed the Deficit Reduction Act of 2005, which - among other things - will reduce Medicare reimbursement rates for imaging procedures performed in physician offices and free standing centers effective January 1, 2007.

The following are some basics medical professionals should understand now:

The act doesn't impact all imaging facilities or procedures.

The changes will affect the Medicare reimbursement rate for MR, ultrasound, Nuclear Medicine, PET, CT and many other imaging technologies in the non-hospital setting, for example a physician's office or a freestanding imaging center. This measure does not affect hospital inpatient or hospital outpatient procedures.

Reimbursement changes apply to only part of the payment.

The technical component payment - the amount paid for all services pertaining to performing the imaging procedure - including technician and equipment costs, will be reduced by the government. Reimbursement for the professional component payment will remain the same.

This may not be the final word.

Because these reductions are not effective until January 1, 2007, there is an opportunity for patients and physicians to eliminate or lessen the impact of this legislation by lobbying Congress.

There is some good news.

The bill does include a provision favorable to providers - a one-year freeze on Medicare physician reimbursement rates, which otherwise was expected to be cut by 4.4 percent, effective January 1, 2006. In addition, the bill has a provision that provides new reimbursement for Ultrasound screening for Abdominal Aortic Aneurysms (AAA).